Interest rates on the rise and a lower inventory of homes are tightening access to the housing market. At the same time, nonbank, online-only lenders have boomed, accounting for 73% of loans. With deep pockets and national footprints, online lenders are also able to buy ads everywhere that traditional mortgage lenders appear in search, driving up digital ad prices and dominating the paid search market. This has intensified competition in the already highly competitive mortgage lending industry, prompting financial institutions and loan officers to look to their digital strategies to bring in leads.
This trend is likely to continue in the coming years. And members of the digital-native Millennial generation, who rely on online search to find home loans — and everything else — are taking over as the primary home-purchasing segment of the population. In this environment, an organic local search strategy is no longer just beneficial for traditional mortgage lenders — it's essential.
A study we recently conducted found high error rates in the most basic online information about loan officers. Of the nearly 6,000 loan officers whose online presence we studied , 64% of their business listings contained incorrect addresses, 42% had phone number errors, and 46% had errors in business names.
The mortgage industry has always been about trust. It's a person-to-person business, and customers are seeking a professional to help them with the largest purchase of their lives. The desire to work with an expert means that the search for loan officers is inherently a local one, and discoverability in local search will make or break a lender. But while mortgage customers still look to connect with a loan officer for advice throughout the process, the customer journey now starts with online search.
If a prospective homebuyer can't find you online, can't see your reviews, or sees incorrect information, he or she will move on, and that lead is lost before the customer ever sets foot in your office. Whether that lead is lost to another loan officer or to an online lender who bought an ad associated with your keyword, the costs of not appearing in the local pack — the top three search results in a given area — can be high.
Reviews are a particular challenge in the mortgage industry. While many mortgage businesses collect online reviews on their own websites, most do not leverage them effectively across the digital ecosystem. Younger consumers especially are consulting online review sources like Yelp, Google, and Facebook to gauge the lender that best meets their needs. Cultivating reviews is key to getting found.
The high numbers of errors in mortgage industry information are both a challenge and an opportunity, as loan officers with deep, high-quality information that consumers can see in online search hold a distinct competitive advantage.
Intelligent Search and AI
All of this industry-specific change comes against the backdrop of a shift in the way people use the internet. Artificial intelligence that interprets the intent of the user is ingrained in search engines, map apps, and voice assistants like Siri, Google Home, and Alexa.
Since AI depends on detailed business information to supply users with accurate answers to queries like "Who are the top-rated mortgage brokers in Connecticut?" and because voice search often only returns one result, it is incumbent on lenders to build a robust online presence in order to rank at the top for specific queries.
These trends are here to stay, with voice search already representing 20% of all searches, according to Google. ComScore also predicts voice search will reach 50% of all searches by 2020.
Digital Knowledge Management
The problem that our recent study points to is not a digital advertising one, and solving it carries no cost-per-click. It is much more fundamental than that. It's a problem of control over digital knowledge — the essential, structured information that a business wants to make publicly accessible. Digital knowledge includes everything from a loan officer's name, address, and phone number to her education, experience, specialties, customer reviews, and more — the building blocks of any brand.
Mortgage search is local, and so an effective digital strategy for local search enables loan officers to compete with the big players in the industry.
While some loan officers attempt to correct the information about themselves and their business manually everywhere it lives, the fragmentation of the digital world — with brand information scattered across many sites — makes this an enormous undertaking. And particularly so in a high-churn industry like consumer lending, where loan officers frequently move to different companies and need to update their affiliations online.
The good news is that this is a highly solvable challenge. Tools like Yext for Mortgage can help you streamline and optimize your information so that you appear with correct, consistent information where your customers are most likely to search, increasing trust and your business pipeline.